GOP platform signals possible shift in contractor fortunes

The Republican Party’s view of the Transportation Security Administration and the U.S. Postal Service provide a glimpse of a potential change in federal contracting, should former Massachusetts Gov. Mitt Romney win the White House in November.

Similarly, “Congress should explore a greater role for private enterprise in appropriate aspects of the mail-processing system,” the GOP adds.

Those positions suggest that the presidential election could change the government’s attitude toward purchasing and how closely agencies work with the private sector, said Robert Burton, partner at the Venable law firm and a former deputy administrator of the Office of Federal Procurement Policy. Will the Barack Obama administration’s drive for giving more federal work to government employees to do directly stay in place, or will feds compete against companies for the work they’re doing now?

It isn't a new question, however. To insource or outsource has been the question for years.

Two months after Obama became president in 2009, he released a presidential memo turning federal procurement 180 degrees from the direction in which President George W. Bush was marching. The Bush administration’s theme was competitive sourcing, in which the public sector and private sector vie for certain government work. Obama said that push had gone too far.

“The line between inherently governmental activities that should not be outsourced and commercial activities that may be subject to private sector competition has been blurred and inadequately defined,” Obama wrote in his March 4, 2009, memo.

On the legislative side, Congress had undertaken a similar effort. Appropriations bills essentially condemned competitive sourcing. On the other hand, the bills allowed departments to review jobs that were contracted to the private sector. If appropriate, the agency could take back the work if the federal employees could do it better and cheaper.

The fiscal 2009 Omnibus Appropriations Act, which Obama signed soon after releasing his memo, prevented agencies from engaging in new competitive sourcing projects. The law also required agencies to establish guidelines for bringing back government work currently being performed by private contractors.

Since then, officials have pushed for clear lines between contractors and federal employees, as agencies pull more work in-house. The Obama administration told officials to not let contractors conduct inherently governmental functions, or jobs that only federal employees should do, such as conducting a criminal investigation. They should also be very wary of giving companies work that is even closely associated to inherently governmental functions. Furthermore, Obama introduced a new category of work, which further divided contractors from federal work. The critical function is work that is “necessary to the agency being able to effectively perform and maintain control of its mission and operations,” as the Office of Federal Procurement Policy defined it in 2011. Administration officials wanted to have enough knowledge in the government workforce to not be overly reliant on the private sector.

Now though, experts say the pendulum could swing the opposite direction if Republicans gain control of the White House or Congress.

“A Republican president and at least one house of Congress controlled by the Republicans would bring a strong likelihood of outsourcing coming back to the forefront of the management debate,” said Larry Allen, president of the Allen Federal Business Partners.

If the nation chooses Romney, Allen said the government would begin outsourcing more federal work, especially where there is either the perception or reality that a government function competes with the private sector.

Nevertheless, under competitive sourcing, federal employees have a winning record. According to a Competitive Sourcing Update published in 2007 by OMB’s Office of Federal Procurement Policy, employees won 87 percent of the work competed in fiscal 2006. Between fiscal 2003 and 2006, they won 83 percent of them.

But federal labor unions foresee a bleak future with a Republican-led White House, based on the GOP platform.

“As this platform makes clear, a Romney-Ryan administration would arbitrarily downsize the federal workforce, dismantle Medicare and Social Security, [and] outsource our national security to profit-driven private sector companies,” J. David Cox Sr., national president of the American Federal of Government Employees, said Aug. 27.

In other words, he added, “The GOP platform makes ‘government’ out to be a dirty word.”

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

FCW investigated efforts by the departments of Defense and Veterans Affairs to improve a joint data repository on military and veteran suicides. Something as impersonal and mundane as incomplete datasets could be exacerbating a national tragedy.

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Reader comments

Mon, Sep 17, 2012
Paul

I am neither left nor right and have worked in the private sector longer than federal and earned my bones in each. It just amazes me how much people forget the "good ole days" when the corporations had more control. Remember the banana wars,coal miners left to die (think black lung), food that was often unfit to feed pigs, and quack medicines that included such great remedies as opium. More importantly, if you were injured and couldn't work than your family was expected to simply starve to death because you were expendable. And lets not forget that most of our pretty toys are the indirect result of government funded research conducted with industry cooperation. Unlike most folks, I have actually studied quite a bit of history rather than listen to a poorly educated politician or journalist. As I said, I believe private industry can and should do quite a bit, and the examples presented were good, but only represent a fraction of what the government does. In my experience, each needs the other whether they're willing to admit it or not.

Wed, Sep 12, 2012
JimS

@JB: we are not saying the gov't is incompetant in all areas...only that it should stick to the responsibilities bestowed upon it by our constitution. Namely: providing for common defense, administering fair laws, and regulating commerce & collecting appropriate taxes.
After 235+ years of prolific legislation, we are left with a government out of control. their roles, influence & power has expanded beyond the confines of "limited government". The founding fathers were leery of politicians who ingratiated themselves to constituents via handouts...they viewed that as tyranny. For the sustainability of our Republic it is paramount that we return to our limited government roots. Out of control spending, if you recall, was the downfall of Soviet Russia. Outsourcing jobs to those that are more able & less costly is always a good idea. For now, the feds need to focus on creating a budget and sticking to it.
We go further into the whole by the hour and all the left wants to do is increase government's role and spend more...all while not even having a budget. It's nonsensical.
Cut budgets, cut programs and promote personal responsibility. If you do that, the gov't is left with the limited roles they serve well.

Tue, Sep 11, 2012

Paul has gotta be another pro-government/anti-private sector liberal who does not understand reality. Most everyone works for a profit, because if we did not then this country and all its people would go bankrupt, hungry, and without shelter and any sort of medical care. It is the government that is the one that usually will sell out the people for votes and/or a legacy - especially the Dems. I have worked for both the Feds and the private sector and I know exactly how poorly (compared to the private sector) things get done in the government, with a lot of waste primarily for image. Unfortunately too many Feds have so little experience in the private sector that they have no idea just how wasteful they are and how little importance much of their work really is to this country because they are so focused on image and not on its profitablity (usually none) to the citizens.

Tue, Sep 11, 2012
GB

The government can't do anything is a recent phenom. At one time our government did everything right. It's propaganda. All our taxes will go up and out the back door. Corporation do nothing that doesn't benefit their bottom line including charity. Corps get tax credits. Do you think they would if they didn't? Next people will say the gov't can't fight wars. We need private industry mercs. Remember our history. It didn't turn out so well for other countries. To privatize everything, is like saying you want an Oligarchy or Facism. That's what you get when corporations own and run everything. Corporations sole purpose is profit. If corps could put a $ on you or your children, then you would become a commodity to use or sell. Yes, they would sell us out to the highest bidder. Believe me, there is nothing wrong with corps earning a profit. They should not however become the government. We, the government do things for the benefit of society not for profit. Finally, if you say the government is incompetent, then you are saying the American people are incompetent because in a Democracy, we are the government. So, are you incompetent? Once we had balance. Then certain people deliberately upset the balance. Without government we could be paying a toll to enter or exit our street.

Tue, Sep 11, 2012
Lorin Partain

@ Paul,
"...anything of significant importance needs to kept within the government realm."
Right like making way for the railroads or the space program or something like that right? You should pick you head up out of the propaganda and read some real history. James J Hill built the only transcontinental railroad to not go bankrupt, and he did it without any government loans and no need for the army to murder Indians or corral them onto reservations. Once legalized, space travel was achieved by the private sector in a relatively short time, and with far less expense and with a far safer system. Whatever government does it does expensively, poorly, and usually at the cost of innocent lives. The private sector does everything better, when allowed to operate. We need a government that governs least as Jefferson pointed out, not your fascist state.